US economic momentum has slowed – Deutsche Bank

Research Team at Deutsche Bank, notes that the US economic momentum has slowed, and growth should fall to 1.2 per cent from 2.4 per cent in 2015.

Key Quotes

“The main drag, especially in the first half of the year, comes from high levels of inventories which mean demand can be met without additional production. Weak external demand, due to dollar strength and subdued global growth, and weak business investment (think energy), will weigh on the economy.

Fundamentals for the consumer and housing remain reasonably solid and should spur growth in the second half as the inventories drag fades.

So far slowing growth momentum has not negatively impacted a robust labour market, which is near full employment, and wages are showing signs of accelerating. Inflation has risen but remains below the Fed’s target and is unlikely to rise materially further this year.”
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